The New York Stock Exchange badly welcomed strong American employment figures at the opening on Friday while Elon Musk and “his bad feeling about the economy” weighed on technology stocks.
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Around 2:10 p.m. GMT, the Dow Jones index lost 0.65%, the Nasdaq with strong technological coloring, dropped 1.79% and the S
Thursday, the indices had ended on a note of hope, fueled by bargain buying. The Dow Jones gained 1.33% to 33,248.28 points, the Nasdaq index 2.69% to 12,316.90 points and the broader S index
The US economy added more jobs than expected with 390,000 new hires in May and the unemployment rate remained at 3.6%, near its lowest in fifty years.
This is less than the 436,000 job creations in April (data revised upwards), but better than the 325,000 that were expected by analysts.
With job gains widespread across many sectors—except retail—this report "isn't going to stop the Fed from hiking 50 basis points for the next two meetings," commented Michael Pearce of Capital Economics.
This is what worried the market among others on Friday.
“This report is too good to convince the market that the Fed will take a break from rate hikes after its planned 50 basis point hikes in June and July,” also noted Patrick O’Hare of Briefing.com.
Investors reacted by getting out of bonds, which pushed yields on Treasuries close to 3% before stabilizing at 2.94% against 2.90% the day before.
In less than two weeks, the US Federal Reserve is expected to raise policy rates again by half a percentage point, and probably in July as well, according to officials' indications. But the markets are wondering what the Central Bank will do in September.
On the tech front, investor sentiment was dampened ahead of the opening by news reports that Tesla boss Elon Musk talked about a 10% cut in his group's workforce.
In an email to executives, the billionaire said he had "a super bad feeling about the economy", asked to "suspend all hiring worldwide" and mentioned a 10% reduction in staff at the company which employs a just over 100,000 people.
The title of the electric car manufacturer fell 7% to 720 dollars, leading to a decline in the big names in Tech. Google, Apple, Facebook (Meta) were all losing more than 2%.
In the electric vehicle sector, Rivian dropped 3.38% and Lucid 3.56%.
"The gloomy outlook presented by Elon Musk (...) follows comments from other business leaders who have also given a pessimistic assessment of the economy, such as JP Morgan CEO Jamie Dimon", noted analysts from Wells Fargo.
On the stock exchange, the largest cryptocurrency platform in the United States, Coinbase, plunged 7% to $68 having, as Tesla intends, imposed a hiring freeze.
Bitcoin also slipped back below 30,000 dollars (-1.96%).